Vanguard reports strong results, outpacing rivals

SHIPMENTS BOOST:：Guidance suggests that the company will fare better than its peers in the fourth quarter, a traditional low season with declining sales

By Crystal Hsu / Staff reporter

Tue, Oct 30, 2012 - Page 14

Foundry operator Vanguard International Semiconductor Corp (世界先進) saw its net income grow more than sevenfold last quarter to NT$795 million (US$27.14 million) from a year earlier on robust mobile and tablet demand, top executives said yesterday.

“Overall, the Hsinchu-based company put up stronger earnings results than guided during the July-to-September period as gross profit margin remained unchanged at 28 percent, compared with its estimates of 24 percent to 26 percent,” Vanguard president Fang Leuh (方略) told an investors’ conference.

However, blended average selling prices rose only 3 percent, lower than the company’s earlier guidance of growth of between 4 percent and 6 percent, Fang said. He attributed the difference to weaker demand from the computer sector.

These results translated into earnings per share (EPS) of NT$0.51, stronger than EPS of NT$0.48 in the second quarter and NT$0.06 a year earlier, company data showed.

For the current quarter, the company expects its utilization rate to stay flat sequentially at between 84 percent and 86 percent, gross profit margin to weaken to between 21 percent and 23 percent, and blended selling prices to dip by between 1 percent and 3 percent in US dollar terms, Fang said, based on a two-month order visibility.

The guidance means Vanguard will fare better than its peers in the fourth quarter, a traditional low season with sales expected to decline 10 percent to 15 percent for the industry, analysts said.

Vanguard chairman Chang Ching-chu (張青駒) said 50 percent of customers are destocking, while the other 50 percent are building up inventory in anticipation of strong sales.

“Lunar New Year sell-through will set the pace for firms next year,” he said.